|
|
Our NewsletterIssue No. 38: Dangerous Target Practice:
Taking Aim at Drug Patents A recent Stat News article highlighted plans in the new Congress to reduce drug prices by abridging the intellectual property rights of pharmaceutical companies. There is a certain irony here. On Dec. 7, the same day the article appeared, the U.S. government’s Centers for Medicare and Medicaid Services reported that prescription drug spending in the U.S. last year rose by only 0.4% and that the price of the average medicine declined by 1.4%. This disconnect has, unfortunately, become the new normal for policy debates involving pharmaceuticals. We will come back to the details of the CMS report shortly, but first let’s examine Lev Facher’s Stat article. It began: Democrats, newly empowered in D.C. and on the hunt for bigger and bolder ways to lower drug prices, are suddenly taking aim at a far more central part of pharma’s monopoly power: the patents the industry holds on its drugs. For years, lawmakers from both parties have shied away from addressing the industry’s intellectual property. Muck with a drug company’s government-granted monopoly, the thinking goes, and investments in research and development will disappear. “Monopoly power” for developers of drugs is limited. As we noted in Newsletter No. 37, patents on medicines generally run for 20 years from filing, or about 12 years from the time the average medicine hits the market. (By contrast, Disney has held a copyright on Mickey Mouse since 1928.) After the patent expires, makers of generic medicines, which now represent 85% of all prescriptions, rush in and prices fall. Scott Gottlieb, the Food & Drug Administration commissioner, has made a priority of lowering regulatory barriers to bringing generics to market, and the effort is paying off. In 2016, the FDA issued 73 first-time generic approvals. Through the first 10 months of this year, the figure is already 82. The U.S. has trailed Europe in bringing biosimilars, which have “no clinically meaningful difference” from reference biological products (sophisticated treatments, often targeted at cancers and autoimmune diseases), to market, but Gottlieb has focused attention here as well. The FDA this month approved the seventh biosimilar of the year, compared with five in 2017 and three in 2016. Often, however, competition for patented drugs emerges well however, well in advance of the patent expiration. After all, the patent does not prevent other companies from patenting different molecules and biological products to address the same indication. For example, since an innovative cure for Hepatitis C was approved by the FDA in 2014, four other companies have brought patented drugs to market to fight the disease, and prices have fallen sharply. READ MORE HERE. |
What Others Are Saying"The anger directed at the pharmaceutical and biotech industries overall is misdirected. The single biggest driving force for increased health-care spending in the U.S. is the rising cost of labor, not drugs." "Even if pharmaceutical spending were rising as a share of total health care spending, but that rise was due to pharmaceutical investments driving down expenditures in other health care areas (e.g. a reduced need for more expensive surgeries), then it would still be inaccurate to argue that pharmaceutical spending is driving overall health care inflation." |
Newsletter Archive
Proudly powered by Weebly